Too Human Dev: If Used Games Continue There Won't Be An Industry

More doom and gloom news about the video game industry. Remember No. 3 on the list of the Top Misconceptions about the Gaming Industry? Well, Too Human lead designer and boss of studio Silicon Knights, Denis Dyack, had some extra misconceptions to share about the state of the industry, its current direction and how it's dying, all because of used game sales.

In an interview with the newly re-launched, international GameIndustry.biz, Dyack pointed out that...

"There used to be something in games for 20 years called a tail, where say you have a game called Warcraft that would sell for 10 years. Because there are no used games, you could actually sell a game for a long time, and get recurring revenue for quite a while. Recurring revenue is very key,"

"Now there is no tail. Literally, you will get most of your sales within three months of launch, which has created this really unhealthy extreme where you have to sell it really fast and then you have to do anything else to get money,"

Why on Earth would he use a PC exclusive to give an example of selling well for many years? How about, I don't know...Sonic 2, which managed to sell quite well, according to The Magic Box, and had quite the shelf life even though the industry still had the booming pre-owned sector looming over the rest of the market during that era (Funcoland anyone?). It would be pointless to point out also that, according to Industry GamersGrand Theft Auto IV nears the 20 million mark for units sold since its release in 2008, where during that year the game managed to break industry records at the time of its release.

There are about a dozen other examples of other games that continue to sell well despite being old, which destroys Dyack's argument that used games have magically somehow impeded on the sales of newer games. The real problem is what Addmired's CEO Gabriel Leydon and Ubisoft's creative director from Assassin's Creed III, Alex Hutchinson, mentions about poor AAA games that don't offer up enough replay value at their price point, hence people are inclined to trade the game in, and are less likely to spread positive word of mouth thereafter.

Dyack goes on to say that...

"I would argue, and I've said this before, that used games are cannibalizing the industry. If developers and publishers don't see revenue from that, it's not a matter of hey 'we're trying to increase the price of games to consumers, and we want more,' we're just trying to survive as an industry. If used games continue the way that they are, it's going to cannibalize, there's not going to be an industry," ... "People won't make those kinds of games. So I think that's inflated the price of games, and I think that prices would have come down if there was a longer tail, but there isn't."

This is kind of the opposite of what Wasteland 2's Brian Fargo was saying, insofar that publishers are the ones responsible for inflated and unnecessary budgets, and the marketing sheets for EA seems to prove this. Hence I tend to agree with Fargo more than Dyack in this instance because it just makes more sense and the numbers are on Fargo's side.

Also, David Braben of Frontier Developments recently mentioned that if used games didn't exist we would have lower retail prices for newer games, but there's really no evidence whatsoever to support this. Added to this, not every game is an AAA title but just about every new release from a major publisher carries a $60 price tag, even digital games released on PC, so again, the numbers don't match up in supporting that somehow removing something like GameStop's $1.2 billion dollar used game revenue will make it better for consumers and the game industry as a whole.

Dyack went on to say that somehow used games will create massive budgets for AAA games, claiming...

"On the top side of the triple-A, highly-funded titles, you have $100 million games, and looking towards next generation people once again are saying we're going to have development costs that are two or three times of what they were last generation. I cannot see how that economy is going to continue,"...

"I don't think as an industry we can afford $300 million budgets. I think some games can, don't get me wrong. For a game like Call of Duty, if they had a $100 million budget, or whatever their budget is, they can afford it. That's not the industry, that's sort of a one-off. But what is everyone else going do?"

Use Kickstarter?

Anyways, the $100 million dollar game budget is another modern day gaming myth, and very, very, very few games even top that kind of budget expanse.

What's more is that there are plenty of middleware and engine solutions available that are extremely affordable to enable developers both big and small to create high-quality games at a fraction of what it used to cost during the sixth generation of gaming. If a company is spending $100 million on a project and it's not on a new game engine or they simply refuse to use affordable resources and assets to cut down on production and development costs, then they're just pissing money into the wind. You can't really blame the used game market for poor planning and financial mismanagement, just ask Realtime Worlds.

You can check out the entire interview with Silicon Knights' Denis Dyack over at GameIndustry.biz.